superfund excise tax chemicals

Kti Chemicals Inc is a superfund site located at 1170 Sonora Ct, Sunnyvale, CA 94086. A2. Client Advisory Board, 1175 Lombardi Access Rd., Ste 500, Green Bay, WI 54304. Learn more about Superfund Excise Tax changes effective July 1, 2022, including key considerations for dealings with the reinstated Superfund Tax on chemicals and substances. The Infrastructure Investment and Jobs Act signed into law November 15, 2021, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. The relief applies to the first three quarters of the SCET, i.e., the third and fourth quarters of 2022 and the first Initially, the Superfund program called for taxes by manufacturers of crude oil and certain chemicals to fund a trust to pay for environmental cleanup activities. Notice 89-61provided guidance under the previously applicable Superfund excise tax. The Inflation Reduction Act (IRA) enacted on August 16, 2022, created a new corporate alternative minimum tax (AMT) for taxable years beginning after December 31, 2022. AllRightsReserved. 2022 Global Digital Trust Insights Survey, Application Security and Controls Monitoring Managed Services, Controls Testing and Monitoring Managed Services, Financial Crimes Compliance Managed Services, Virtual Business Office services for healthcare. This current iteration is set to expire on December 31, 2031. The Superfund chemical taxes should be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. As a result, Notice 2022-15 provides welcome relief and affords SCET taxpayers additional time to perfect their SCET deposit process. The recent reinstatement of Superfund chemical excise taxes on certain taxable chemicals and specified taxable substances takes effect July 1, 2022, and will be imposed Taxpayers with a quarterly liability greater than $2,500 will be required to make semi-monthly tax deposits of the tax. Petitions to Add Polyoxymethylene and Polyphenylene Sulfide. If you are a manufacturer or importer, it is essential that your organization be prepared to report and remit the excise tax. This law levies taxes on the manufacture, production, or importation of 42 specific chemicals and another 121 chemical Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. The table below outlines products that are impacted by this excise tax. July 1, 2021 thru June 30, 2022. - 2023 PwC. Notice 2021-66 does not specify the tax rate for each taxable substance. She specializes in pass-through entity and multi-state compliance for family owned businesses in a variety of industries including manufacturing and distribution, retail and real estate. Explore available tools within IT systems/databases to collect data needed to comply with reporting requirements. 4295) on December 22, 2022, that accomplishes three things: (1) eliminates the requirement to affirmatively elect New Jersey S corporation status, while including an opt-out provision; (2) adopts the federal centralized partnership audit regime, with certain modifications; and (3) ends certain COVID-related extensions. See section 4671(b)(3). Fast forward to today. For purposes of claiming refunds under section 4662(e) for section 4661 tax paid on chemicals used in the production of an exported substance, in the case of a petition of an importer or exporter (i) that is filed and accepted by the Secretary before January 1, 2023, (ii) that seeks to add the substance to the list of taxable substances, and (iii) based on which the Secretary adds the substance to the list of taxable substances, both the filing date of the petition and the date the substance is added to the list of taxable substances will be deemed to be July 1, 2022. Companies might receive a refund of the tax paid if they export products made with specific chemicals and substances if they paid before manufacturing. July 1, 2021 thru June 30, 2022. Nashville | Proc. We recommend taking the following steps now to determine how this excise tax applies to your company and to help ensure compliance: In addition, it is important to identify your available resources for determining taxability, exemptions, making tax deposits, filing applicable IRS registrations (Form 637, Application for Registration For Certain Excise Tax Activities) and filing quarterly tax returns (Form 720, Quarterly Federal Excise Tax Return, and attachment Form 6627, Environmental Taxes). | All Locations, Cherry Bekaert is the brand name under which Cherry Bekaert LLP and Cherry Bekaert Advisory LLC, independently owned entities, provide professional services in an alternative practice structure in accordance with applicable professional standards. Our use of the terms our Firm and we and us and terms of similar import, denote the alternative practice structure of Cherry Bekaert LLP and Cherry Bekaert Advisory LLC. Tech trends in Gas tax holiday: impact of changes in motor fuel tax rates, Tax automation: the ultimate guide to tax process efficiency, Reporting Is there a way to check the status of an application for Activity Letter G registration? This approach includes: Let us help you address the compliance issues associated with reinstatement of Superfund chemical excise taxes. With world scale integrated manufacturing facilities we are The Brazilian government on December 29, 2022, published draft legislation to align Brazils transfer pricing rules with the Organization for Economic Cooperation and Development (OECD) Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. Are Your Companys Year-End Compensation Accruals Tax Deductible? Learn how tax plays a key role in your business while the stakes continue to be high in regards to managing potential changes to US and global tax policy. The Superfund law (P.L. All rights reserved. Superfund Tax Chemicals List According to the IRS, A taxable chemical is a chemical that is (i) listed in section 4661 (b), and (ii) manufactured or produced in the United States or entered into the United States for consumption, use, or warehousing. Below is the current list of taxable chemicals. (added June 24, 2022), Q9. The Aerojet General Corp. Superfund site covers about 5,900 acres near Rancho Cordova. The first reporting of Superfund excise taxes is due October 31, 2022 (for the period July 1, 2022, through September 30, 2022). More substances are expected to be added in the future, but the list as it stands is available below. The Time Is Now: Comment Period Open For The Federal Trade Commission Canadas Foreign Buyers Ban: What You Should Know About the Ban on CMS Proposed Rule for Refunding Overpayments Would Align With False EPAs Proposal to Tighten the Fine Particulate NAAQS: Whats Proposed Commonwealth Court Strikes Down 2021 Accessibility Regulations as Is Texas Getting Ready to Expand Its Compassionate Use Program? Part II of Form 6627, Environmental Taxes, will be updated to reflect the tax rate per ton of each taxable chemical. The revenues are intended to help pay for the approximately $550 billion in new spending on infrastructure that is part of the 2021 Infrastructure Investment and Jobs Act. The imported substances tax is due upon the first sale or use after import. That authority Additionally the new legislation also decreased the threshold amount from 50% to 20% of July 1 is fast approaching and the window to prepare for compliance with the reinstated Superfund Tax is brief. Section 4662(c)(2) provides an additional exemption from tax liability where a company imports a taxable chemical and exchanges that chemical as part of an inventory exchange with another person. There are 42 listed taxable chemicals under IRC 4661, which imposes excise tax on the sale or use by a manufacturer, producer or importer of such chemicals. If your organization believes it may be subject to the reinstated Superfund Excise taxes, be prepared to begin reporting on chemical use. It started with the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 19801986. Orlando | The Infrastructure Investment and Jobs Act lowered this threshold to 20%. This ABA Tax Times article provides an illustration of the challenges faced by the oil and gas industry in applying one of these special rules related to two products derived from natural gas: methane and butane. At that time, the application of the tax and the deployment of funds were quite well understood, and the U.S. Internal Revenue Service (IRS) developed a relatively robust series of guidance documents to explain how the tax operated and who was subject to the tax. The first reporting of Superfund excise taxes is due October 31, 2022 (for the period July 1, 2022, through September 30, 2022). Cherry Bekaert LLP is a licensed CPA firm that provides attest services, and Cherry Bekaert Advisory LLC and its subsidiary entities provide tax and advisory services. Notice 2022-15 recognizes the burden on taxpayers, explicitly noting the short time frame between the reinstatement of the Superfund chemical taxes and the due date of the first deposit, the unavailability of the 40.6302(c)-1(b)(2) deposit safe harbor in 2022, the possible difficulties of computing the correct amount of tax during the third calendar quarter of 2022 (which is both the first calendar quarter the taxes are in effect and the look-back quarter for the first calendar quarter of 2023), and the number of new taxpayers owing Superfund chemical taxes that have not previously had to comply with the deposit requirements of section 6302.. $300 plus $0.090 per each acre-foot greater than 10 acre-feet. If these deposits are missing, there is temporary relief until March 2023, which includes the third and fourth quarters of 2022 and the first quarter of 2023. Many in the industrial chemical community are unfamiliar with the Superfund excise tax legacy, and the IRS is seemingly unprepared for the learning curve challenge the reactivation of the tax has created. A15. The entities falling under the Cherry Bekaert brand are independently owned and are not liable for the services provided by any other entity providing services under the Cherry Bekaert brand. The frequent and sizeable requirements of the reinstated superfund excise tax reporting can be burdensomeespecially for resource-constrained tax departments or those unfamiliar with the requirements. Calculating These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so. 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